Who’s behind Amazon in IaaS cloud revenue? Not Microsoft

Research firm IDC is out with its latest semi-annual tracking of IaaS public cloud vendors and while the top provider in this market – Amazon Web Services – will not surprise you, numbers two and three just might.

IDC estimates that IBM’s Infrastructure-as-a-Service cloud revenues are larger than those of Microsoft in this still-emerging market.

“AWS isn’t the only game in town when it comes to cloud,” says IDC analyst Melanie Posey. The cloud market is sometimes seen as a two-horse race with Microsoft trailing AWS , but Posey says not to count out IBM. “It’s not necessarily the case that everything not running in the public cloud has to get there by a certain date,” she explains. “IBM’s approach has been informed by its customer base, who have all types of workloads that need different deployment models.” Whereas AWS focuses mostly on public IaaS cloud, Microsoft and IBM have a broader offering of cloud and non-cloud offerings, she says.

Cloud numbers game

IDC estimates that AWS’s pure IaaS revenue in 2015 topped $5.516 billion. IBM is a distant second at $761.7 million, while Microsoft pulled in $729.6 million in 2015, IDC says.

Rackspace, AliCloud (the IaaS component of Chinese ecommerce giant Alibaba) and Google round out IDC’s list of the top five IaaS cloud vendors in terms of worldwide revenue.

Do consider this, though, when looking at these numbers: Cloud vendors are notoriously opaque when it comes to reporting revenue. Amazon reported that it collected $7.8 billion in 2015 from AWS. IDC doesn’t count all AWS offerings as pure IaaS though; the company’s Relational Database Service (RDS) and support services are not lumped into IDC’s IaaS estimate for example, hence the discrepancy in the numbers from IDC and what Amazon reports.

Microsoft provides a cloudy view of its Azure financials . The company lumps IaaS Azure revenue in with on-premises server license revenue, which stood at $5.1 billion as of last year. IDC estimates less than 20% of that is from Azure’s IaaS. Azure also has many PaaS offerings, which IDC would not count. Microsoft also says its Office and Office 365 revenues were more than $6.5 billion. So, if a more holistic view of cloud is considered with IaaS, SaaS and PaaS, Microsoft could be earning more than AWS from cloud operations.

IBM is in a similar boat as Microsoft in that it says it counts $10.2 billion in cloud revenue , including $4.5 billion from “as a service” revenues, but does not break out numbers for IaaS, PaaS and SaaS.

IDC (a sister company of Network World) bases its Worldwide Public Cloud Services Tracker on multiple factors, including public filings, vendor interviews and survey results, end user surveys and analyst estimates. The Tracker only takes into account pure IaaS, so it does not involve application development platforms, SaaS apps and other non-virtualized, single-tenant hosted services.

Until cloud revenues are more robust, don’t expect vendors to willingly break out their financials. In the meantime, we’re left with these rough estimates.